A NORTH-EAST call centre which opened two years ago is to close as a High Street bank seeks cheaper labour in India.

Lloyds TSB is the latest financial services firm to announce it is axing British call centre jobs to take advantage of English-speaking graduates in the sub-contintent, who earn about £3,000 compared with £12,000 here.

More than 980 jobs will be lost at the Newcastle centre, which was officially opened in 2001 by group chairman Sir Brian Pitman and North Tyneside MP Stephen Byers, then Trade and Industry Secretary, who said he was glad the region was "reaping its share of the benefits of this expanding sector".

A bank spokeswoman said: "We operate in a fiercely competitive environment and it is vital that we find ways of running our business effectively and competitively."

The company said it would try to relocate workers at other branches and that the closure decision - the centre will shut by the end of next year - was partly prompted by high employee turnover.

There are more than 20,000 people in call centre jobs in the region. Politicians and business leaders hailed the industry as the answer to unemployment in the wake of the loss of mining and shipbuilding.

But just as clothing manufacturers have moved to the Far East to cut costs, many big firms in the finance sector are moving to Indian cities such as Bangalore and Bombay.

HSBC recently announced plans to take 4,000 jobs to India, Malaysia and China while BT, which has centres at Middlesbrough and Newcastle, could go to India. National Rail Enquiries could also ship out to the country.

The Union of Communication Workers says 5,000 call centre jobs in the region are under threat and is one of the unions campaigning to save British jobs.

Steve Tatlow, assistant general secretary of the Lloyds TSB Group Union, said: "It is unacceptable that Lloyds TSB should be losing its Newcastle call centre.

"The bank's excuses for closing the call centre are weak on all grounds other than to cut costs at the expense of UK staff."

The union plans to campaign against the closure and hopes to raise 500,000 signatures with a petition taken to bank branches.

The group's call centre at Sunderland, which employs about 600 people, appears to be unaffected.